The benefits of retaining residents are manifold, from cost savings and a positive resident experience to an elevated reputation and increased operational efficiency.
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The benefits of retaining residents are manifold, from cost savings and a positive resident experience to an elevated reputation and increased operational efficiency.
The benefits of retaining residents are manifold, from cost savings and a positive resident experience to an elevated reputation and increased operational efficiency.
$4,000 per unit–that’s the average cost of resident turnover according to an industry study. It’s what makes resident retention such a hot topic and area of focus as it can both enhance your financial standing and the quality of life for your residents. The benefits of retaining residents are manifold, from cost savings and a positive resident experience to an elevated reputation and increased operational efficiency.
Retaining residents can significantly reduce turnover costs, boost revenue from long-term leases and renewals, and lead to higher occupancy rates. With the average cost per unit estimated at $4,000, the financial impact of turnover is substantial. This figure encompasses various expenses, including advertising, screening of potential residents, and the preparation of the unit for a new resident.
The implementation of a resident rewards program is a strategic decision that can significantly impact a PMC's financial well-being. By mitigating turnover costs, bolstering revenue through lease renewals, and elevating occupancy rates, PMCs can fortify their financial standing and work towards long-term prosperity. A meaningful rewards program can motivate residents to prolong their stay, thereby cutting turnover costs and accruing savings. Considering the fact a rewards program is estimated to lead to a 2% reduction in vacancy rates, it adds up quickly (learn about the benefits companies like American Airlines and Starbucks have experienced by implementing loyalty programs). For example, 2% of a 5,000 unit portfolio is 100 units; multiplying that by the $4,000 turnover cost per unit results in $400,000 of savings.
Satisfied, long-term residents are your most potent advocates, more likely to refer your community to their friends, family, and colleagues. This is a cost-efficient strategy to draw in new residents and occupy vacant units. Beyond the mere generation of leads, referrals have the potential to introduce a higher caliber of resident to your community, as referred residents often prove to be more dependable, timely in their rent payments, and diligent in the care of their living spaces. This, in turn, can minimize turnover costs and elevate revenue for your PMC. Plus, with a resident rewards program in place, you can boost referrals by incentivizing residents for referring others to your communities.
Additionally, loyal residents are also more likely to post positive online reviews of your community. This can help to boost your reputation and attract even more new residents. In today's digital age, online reviews are an increasingly important factor in a renter's decision-making process. A few positive reviews can go a long way in helping you to stand out from the competition and attract new residents.
When residents stay in your community for longer periods of time, they have the opportunity to develop relationships with their neighbors, creating a sense of community and belonging. With belonging as a basic human need, a strong sense of community can lead to more loyalty and increased renewals.
Encouraging resident retention through initiatives like a well-structured resident rewards program further enhances community culture. By recognizing and rewarding residents for their loyalty and positive contributions, you create an atmosphere of appreciation and respect, which further motivates residents to continue their positive behaviors. Moreover, the longer a resident remains, the more they become a part of the community, which is why it is so important to foster a tight-knit community for retaining (and attracting) good residents.
By reducing the frequency of resident turnover, PMCs can save time and money associated with the process of finding and screening new residents, as previously mentioned. But PMCs can also optimize staff productivity by focusing on providing excellent service to existing residents rather than constantly onboarding new ones.
The benefits of resident retention extend to the operational costs of PMCs. Long-term residents translate to fewer demands for administrative support. This, in turn, allows property management teams to re-allocate time and resources to activities that augment the residential experience. PMCs can also curtail maintenance costs by mitigating the need for frequent refurbishments and repairs between tenancies.
The strategic focus on resident retention is a cornerstone of operational efficiency for multifamily communities. By prioritizing the needs of existing residents, PMCs can optimize their operations, reduce costs, and deliver superlative service, culminating in heightened resident satisfaction and enduring success.
If you’d like to learn more about how Domuso's resident rewards & payment platform can benefit your PMC, fill out our demo request form!
About Domuso
Domuso is driving digital transformation for the multifamily industry with an advanced platform to manage payments and communication throughout the entire resident lifecycle. Domuso captures 100% of a property’s receivables electronically while giving residents the flexibility to access multiple payment methods from any mobile device.
